Congress Revives Sheldon Adelson-backed Plot to Kill Online Gambling

Is the billionaire casino magnate already exerting his influence over the new Congress?

Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson speaks to hospitality students at UNLV on May 5, 2014 in Las Vegas, Nevada.
National Journal
Feb. 4, 2015, 8:38 a.m.

House law­makers Wed­nes­day are re­in­tro­du­cing a bill that would ef­fect­ively ban bet­ting sites in the U.S.

The Res­tor­a­tion of Amer­ica’s Wire Act, spear­headed by Rep. Jason Chaf­fetz, would “re­store” a dec­ades-old fed­er­al ban on some gambling op­er­a­tions by ex­tend­ing it to in­clude In­ter­net gam­ing. Chaf­fetz, a Utah Re­pub­lic­an, is in­tro­du­cing the bill with six GOP co­spon­sors and the back­ing of one Demo­crat, Rep. Tulsi Gab­bard of Hawaii. The three-page meas­ure is the same as the one Chaf­fetz in­tro­duced last year.

An aide for Sen. Lind­sey Gra­ham con­firmed that the South Car­o­lina Re­pub­lic­an also in­tends to re­in­tro­duce a ver­sion of the bill, though he said a timetable was un­clear. The com­pan­ion bills de­b­uted last spring but nev­er gained much trac­tion.

The House re­in­tro­duc­tion re­news a long-stand­ing fight between In­ter­net gambling sites, brick-and-mor­tar casino own­ers, and fam­ily-val­ues ad­voc­ates.

Chaf­fetz told re­port­ers Wed­nes­day that on­line gambling presents a troub­ling fam­ily-val­ues threat be­cause of the ease with which play­ers can sign up and start bet­ting.

“Put­ting an app on every phone that al­lows people to gamble wherever they are is not a good idea,” Chaf­fetz said. He warned that minors can sign up and start pla­cing bets without their par­ents even no­ti­cing, call­ing it an “im­port­ant mor­al ar­gu­ment.”

Among the on­line ban’s most in­flu­en­tial back­ers is Shel­don Ad­el­son, a bil­lion­aire casino mag­nate who — via massive cam­paign con­tri­bu­tions — wields con­sid­er­able clout among Re­pub­lic­ans.

Ad­el­son has been vo­cally push­ing the mor­al­ity ar­gu­ment for years. In late 2013, the oc­to­gen­ari­an began the Co­ali­tion to Stop In­ter­net Gambling, a lob­by­ing group that formed as a grow­ing num­ber of state­houses across the coun­try were lower­ing re­stric­tions on on­line bet­ting.

But Ad­el­son’s de­tract­ors ar­gue that the wealthy polit­ic­al donor — whose fin­an­cing kept Newt Gin­grich’s 2012 pres­id­en­tial cam­paign afloat for months be­fore Ad­el­son threw his sup­port be­hind even­tu­al GOP nom­in­ee Mitt Rom­ney — is sin­gu­larly mo­tiv­ated by a de­sire to pro­tect his brick-and-mor­tar casino em­pire from di­git­al com­pet­it­ors. “Mr. Ad­el­son, who is per­haps best known for us­ing his enorm­ous wealth to ad­vance a pro-war for­eign policy, is now us­ing his polit­ic­al in­flu­ence to turn his on­line com­pet­it­ors in­to crim­in­als,” former Rep. Ron Paul wrote in an op-ed last Novem­ber.

Pro-gambling groups have also clashed with Ad­el­son, ac­cus­ing him of single-handedly prop­ping up an un­pop­u­lar le­gis­lat­ive cam­paign. Ad­el­son has vowed to “spend whatever it takes” to stop on­line gambling, call­ing it a “so­ci­et­al train wreck wait­ing to hap­pen.” Ads from his group have at­temp­ted to link on­line gambling to fund­ing ter­ror­ism.

“Des­pite out­rageous claims made by op­pon­ents of state-reg­u­lated In­ter­net gam­ing, it has not led to the down­fall of West­ern so­ci­ety,” said John Pap­pas, ex­ec­ut­ive dir­ect­or of the Poker Play­ers Al­li­ance, in a state­ment Wed­nes­day. “In fact, to date there has not been a single doc­u­mented case of a minor play­ing on any of these state-reg­u­lated sites and no re­port of people wager­ing on a reg­u­lated web­site that is not au­thor­ized in their state.”

Chaf­fetz con­firmed that he had met with Ad­el­son when the casino mag­nate came to Wash­ing­ton last month. Sev­er­al re­ports have in­dic­ated that Ad­el­son met with a ma­jor­ity of law­makers who sit on the House Ju­di­ciary Com­mit­tee, which will have jur­is­dic­tion over Chaf­fetz’s bill.

“He’s an act­ive play­er [in the de­bate], and I’m glad he’s sup­port­ing this bill,” Chaf­fetz said, while quickly adding that Ad­el­son had nev­er fun­ded any of his cam­paigns. Ad­el­son did, however, donate tens of thou­sands of dol­lars last cycle to Gra­ham, who is pub­licly weigh­ing a bid for the White House in 2016.

Chaf­fetz also ar­gues that the Obama ad­min­is­tra­tion has ac­ted uni­lat­er­ally to al­low on­line gambling to propag­ate through a 2011 Justice De­part­ment opin­ion cla­ri­fy­ing the de­part­ment’s in­ter­pret­a­tion of the Wire Act. That memo stated that in­ter­state bet­ting across “wire com­mu­nic­a­tions” that do not re­late to sports are bey­ond the scope of the dec­ades-old law.

Chaf­fetz con­tends that memo is a de­lib­er­ate at­tempt to un­der­mine the le­gis­lat­ive pro­cess by the Obama ad­min­is­tra­tion—a charge he and many Re­pub­lic­ans have re­peatedly made on oth­er is­sues ran­ging from im­mig­ra­tion to health care. The four-term con­gress­man — who took over the gavel of the House Over­sight Com­mit­tee last month — said the drive be­hind his bill is as much due to a de­sire to fol­low the prop­er le­gis­lat­ive pro­cess as it is a con­cern about the pro­lif­er­a­tion of on­line gambling

“That’s not the way we change laws in this coun­try,” Chaf­fetz said. “If someone thinks it should be the oth­er way “¦ if someone thinks on­line gambling is good, then in­tro­duce a bill and pass it.”

Chaf­fetz did not spe­cify a time line for mov­ing his bill for­ward, but he said he had been giv­en “good in­dic­a­tions from lead­er­ship” that the meas­ure was of in­terest to them.

Con­gress last shook up the on­line-gam­ing in­dustry in 2006, when it passed the Un­law­ful In­ter­net Gambling En­force­ment Act, which pro­hib­ited busi­nesses from ac­cept­ing pay­ments from in­di­vidu­als if the money was know­ingly be­ing used to wager un­law­ful bets on­line. The law, signed by Pres­id­ent Bush, hurt the growth of the then-fledgling In­ter­net poker in­dustry, but the re­in­ter­pret­a­tion of the Wire Act in 2011 eased those re­stric­tions by deem­ing most on­line bet­ting to be law­ful.

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